Funds from retail investors that had returned to South Korea's stock market are again heading to the U.S. equity market. Korean investors' U.S. stock holdings topped $200 billion for the first time in 4 months, while net buying extended for a fourth straight month from June.

Data from the Korea Securities Depository's securities information portal Seibro showed that as of inquiries on Oct. 5, South Korean investors held $200.2 billion (about 268.3 trillion won) in U.S. stocks.

U.S. stock holdings exceeding $200 billion mark the first time since June 4, about 4 months ago.

South Korean investors' U.S. stock holdings first topped $200 billion on May 11 as a rise in U.S. stocks coincided with buying demand this year. Holdings then climbed to a record high of $206.3 billion on June 2.

Holdings later fell as the U.S. stock market's upward momentum slowed. They declined to $194.8 billion at end-June and to $171.5 billion at end-July.

The mood shifted again from August. U.S. stock holdings rose to $188.4 billion at end-August, then recovered to $194.2 billion at end-September, and moved back above the $200 billion level this month.

Trading flows among retail investors also showed funds moving to the U.S. stock market.

Investors who sold U.S. stocks net in April and May and shifted some funds to South Korean stocks, prompted by measures such as tax breaks on capital gains from overseas stocks, turned back to net buying of U.S. stocks from June.

Net buying totalled $632.96 million in June and surged to $4.67 billion in July. Investors remained net buyers for four straight months, buying $1.96 billion in August and $1.00 billion in September.

Expectations for growth in the artificial intelligence (AI) industry and strength in major U.S. technology shares are seen as lifting demand for U.S. stock investment again. With the U.S. stock market trading near record highs, valuation gains from rising share prices also contributed to the increase in holdings.

The S&P 500 and the Nasdaq index recently set fresh highs again as expectations for tech earnings increased ahead of third-quarter corporate results.

By stock, preference for large U.S. technology shares remained clear.

Tesla was the most-held U.S. stock among South Korean investors, with holdings reaching $22.1 billion. Nvidia followed with $19.2 billion, while Alphabet ranked third with $8.9 billion.

Demand for high-risk products is also continuing. South Korean investors held $5.8 billion of Direxion Daily Semiconductor Bull 3X (SOXL), which tracks three times the daily return of a U.S. semiconductor index, ranking fourth among all U.S. stocks held.

Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 index, followed with $5.7 billion.

As investor funds that moved to the South Korean stock market in April and May head back to the U.S. market in only a few months, the movement of retail investors' money between domestic and overseas markets also appears to be quickening. If strength in U.S. technology shares continues, the scale of Korean retail investors' U.S. stock investment could expand again.